How To Plan A Forex Trade

Successful, calculated planning is one of the key ingredients of becoming a successful forex trader.

Trading from charts requires you to be able to coolly, dispassionately calculate where price is likely to go next (based on previous patterns).

If you can master the technical skill you’ve won half the battle. But many traders fail because they can not control their emotions.

Plan ahead and follow that plan to the letter. This will remove as much emotion and silliness as possible.

How To Plan A Forex Trade

I do my analysis and plan for the week ahead on a Sunday. I plot areas where I believe price is likely to react and write down my reasoning in my trade journal. I am looking for as many reasons as possible for why price is likely to react in a particular area. In the first week of the course I showed you some of these “reasons”. Support and resistance in all its forms are the main part of the equation in my trading.

I start by looking at monthly charts. I make a note of candle sticks and previous major support and resistance. These areas on longer time frames are stronger than smaller ones in my experience. For example lets say the Euro/$ hasn’t broken a support line for 5 years, is that likely to be an area where traders expect it to at least react? Traders all over the world will be looking in the same area. Therefore a bounce often becomes a self-fulfilling prophecy. Trading any commodity using charts is one of those instances in life where we want to be running with the herd. If the majority of traders are shorting (selling) the Euro for example why would I want to buy?

Which Pairs to Trade

Having studied monthly charts I next go down to weekly, daily and even 4 hour charts. I repeat the process on each time frame. I then check out the news, using Forex Factory.com both for their calendar and news reports. Also, I look online at various financial publications that cover my preferred currencies. I’m English but live in Spain and therefore I specialise in trading the Euro/$, Gbp/$ and Euro/Gbp. I recommend that you should major on your own currency. Why? Because I know what is going on in my home countries in terms of news and the “word on the street.” I read the newspapers and news on the television. I therefore am an “expert” or certainly have more knowledge than someone who lives in Australia.

I spend 3 or 4 hours on a Sunday making my plan for the week ahead. I then provide this information to members of my forex mentor group. But the most successful students do their own analysis before looking at mine. The goal is to teach folks how to look for potential forex trades for themselves.

Plan Forex Trades To Avoid Gambling

A lot of traders cannot be bothered to devise a forex trade plan. New traders in particular simply can’t wait to get started to trade. What they are really doing is gambling. Those who do not fully understand what is going on in the markets and simply dive in to trades that have already started are NOT forex traders. How do I know? I spent the first 3 years learning to trade. Even though I have never been interested in gambling in my life, in reality that’s what I was doing. I was of course losing.

I started to become successful when I started to treat my trading as a business. This meant keeping accurate records and making careful plans ahead of time. You wouldn’t start a business without a business plan, would you? With forex it’s the same – never start trading until you have a forex trade plan in place.

Success in the markets is a function of discipline. Most people simply do not have enough self-discipline to determine if they are trading emotionally or objectively. This is where having a defined forex trade plan comes in. A forex trade plan will act as a guide which will keep you on the disciplined trading path.

Why It’s Important to Plan A Forex Trade

Trading without a forex trade plan would be the same thing as driving without knowing where you’re going. You’re trying to get to this goal of “consistent profits”. But since you have no way of knowing whether you’re heading in the right direction, you’ll most likely end up going bust.

With a forex trade plan, you’re able to know if you’re heading in the right direction. You’ll have a framework to measure your trading performance and you are able to monitor this continually. This therefore allows you to trade with less emotion and stress.

All of this and more is covered in detail in my low cost 5 * rated forex mentor program. I and my fellow mentors show you how to trade successfully using proven strategies but also showing you how to properly establish your trading business. Before you waste another penny trading without really knowing what you are doing you need to find a mentor. Someone who has been where you are now and has learned (the hard and expensive way) what NOT to do. I have mentored many 100’s of people in different ways.

If you would like to learn how to trade like a professional check out our 5* rated forex mentor program, RISK FREE; by clicking on the “Get Started Today” Button below

Find out more

To find out more thoughts and inside tips on forex trading, take a look at some of our blog posts.

Related posts:

None of the Forex Mentor Pro team nor its owners (expressly including but not limited to Marc Walton), officers, directors, employees, subsidiaries, affiliates, licensors, service providers, content providers and agents (all collectively hereinafter referred to as “Forex Mentor Pro ”) are financial advisers and nothing contained herein is intended to be or to be construed as financial advice

Forex Mentor Pro is not an investment advisory service, is not an investment adviser, and does not provide personalized financial advice or act as a financial advisor.

Forex Mentor Pro exists for educational purposes only, and the materials and information contained herein are for general informational purposes only. None of the information provided in the website is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, recommendation or sponsorship of any company, security, or fund. The information on the website should not be relied upon for purposes of transacting securities or other investments.

You hereby understand and agree that Forex Mentor Pro, does not offer or provide tax, legal or investment advice and that you are responsible for consulting tax, legal, or financial professionals before acting on any information provided herein. “This report is not intended as a promotion of any particular products or investments and neither Forex Mentor Pro group nor any of its officers, directors, employees or representatives, in any way recommends or endorses any company, product, investment or opportunity which may be discussed herein.

The education and information presented herein is intended for a general audience and does not purport to be, nor should it be construed as, specific advice tailored to any individual. You are encouraged to discuss any opportunities with your attorney, accountant, financial professional or other advisor.

Your use of the information contained herein is at your own risk. The content is provided ‘as is’ and without warranties of any kind, either expressed or implied. Forex Mentor Pro disclaims all warranties, including, but not limited to, any implied warranties of merchantability, fitness for a particular purpose, title, or non-infringement. Forex Mentor Pro does not promise or guarantee any income or particular result from your use of the information contained herein. Forex Mentor Pro.com assumes no liability or responsibility for errors or omissions in the information contained herein.

Under no circumstances will Forex Mentor Pro be liable for any loss or damage caused by your reliance on the information contained herein. It is your responsibility to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content contained herein. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.

Marc Walton, owner of Forex Mentor Pro, communicates content and editorials on this site. Statements regarding his, or other contributors’ “commitment” to share their personal investing strategies should not be construed or interpreted to require the disclosure of investments and strategies that are personal in nature, part of their estate or tax planning or immaterial to the scope and nature of the Forex Mentor Pro philosophy.

All reasonable care has been taken that information published on Forex Mentor Pro website is correct at the time of publishing. However, Forex Mentor Pro does not guarantee the accuracy of the information published on its website nor can it be held responsible for any errors or omissions.